Timeliness Issues and the Payment of
Special Minimum Wages (SMWs) Under FLSA Section 14(c)

The payment of SMWs and overtime compensation must ordinarily be made at
the regular payday for the workweek or, when the pay period covers more than a
single week, at the regular payday for the period in which the particular
workweek ends.

Employers who pay SMWs to workers with disabilities must also keep in
mind the following :

No pay period under the McNamara-OHara Service Contract Act
(SCA) may be longer than semi-monthly, and employers may not be more than one
pay period behind in the payment of wages.

Prevailing wage rates must be reviewed at least once a year, and
adjustments to commensurate wages must be implemented by the end of the next
completed pay period after the review.

The productivity of workers with disabilities paid an hourly SMW
rate must be measured within the first 30 days of their employment and no less
then every six months thereafter. Needed adjustments to raise workers to the
correct commensurate wage must be implemented by the end of the next completed
pay period after the work measurement. Some consulting organizations have
advised employers to pay a training wage amounting to a specific
percentage (often 50 percent) of the prevailing wage during the initial period
before the worker with a disability is evaluated. Paying such a provisional
rate is acceptable so long as the employer understands that it must make up the
difference if the subsequent evaluation indicates that the training rate was
below the employees commensurate rate. Should the provisional training
rate actually exceed the appropriate commensurate wage rate, employers may
not recoup any overpayments in future work weeks because these employees
are still being paid below the FLSA Section 6(a) minimum wage.

Certificates authorizing the payment of SMWs are issued with both an
effective date and an expiration date. The certificate, along with the
employers authorization to pay special minimum wages, will expire on the
indicated date unless the employer properly files an application for renewal
with the U.S. Department of Labor Wage and Hour Division before the
expiration date. If an application for renewal has been properly and timely
filed, an existing certificate shall remain in effect until the application for
renewal has been granted or denied. But when a certificate expires and no
application of renewal has been properly and timely filed, an employer would be
required to pay all workers covered by the FLSA at least the full minimum wage
(or where applicable, the full SCA wage determination rate) for all work
performed after the certificate expiration date.